Nuclear Energy As a Source to Avert an Energy Crunch After Peak Oil: the Economic, Political, Environmental, and Technological Feasibility

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Nuclear energy as a source to avert an energy crunch after peak oil: The economic, political, environmental, and technological feasibility.

Thijs Blom ANR: 300172

Tilburg June 18th, 2012

Bachelor Thesis Advisor: Prof. dr. R. Gerlagh Second reader: Dr. M.A. van Tuijl

Tilburg University Bachelor Liberal Arts and Sciences Major: Business and Management

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TABLE OF CONTENT

Abstract 4

Introduction 5

Methodology 10

Economic perspective 12

Political perspective 18

Environmental perspective 24

Technological perspective 28

Conclusion 34

References 37

ABSTRACT

Conventional oil is very important for the world economy, but it is a finite resource. When its production can no longer increase, so called peak oil, this will have major negative impact on the economy and society. One of those impacts is an energy crunch, and to avoid this, alternative energy sources are necessary to complement for the decreasing production of oil. This paper is a multi perspective feasibility test for one of those alternatives; nuclear energy. Economic, political, environmental, and technical perspectives will be taken into account to answer the main research question: “In order to avert an energy crunch, is nuclear energy a suitable alternative to complement for the decreasing production of conventional oil?” The findings indicate that it is a reasonable alternative; the cost competitiveness, its low carbon footprint, and security of supply are good, but the negative public perception and the risks that are related to waste disposal and the proliferation of nuclear weapons form constraints. Solutions to these problems should come from technological innovations, such as the breeder reactor, as well political solutions for waste and proliferation problems.

INTRODUCTION

For the past two centuries oil has been the most effective and useful natural energy resource. It is cheap, easy to delve, and easy to transport. Oil is used as fuel to generate heat in energy plants, and as raw ingredient in the process of making petrol, diesel, and kerosene. Crude oil can be divided into conventional and unconventional oil. Conventional oil is liquid (also under atmospheric conditions), flows naturally or is capable of being pumped without processing or dilution. (Society of Petroleum Engineers, 1997). It is the so called

‘easy-’ or ‘cheap oil’. It is easy to pump to the surface, to refine and to transport.

Conventional oil is extremely important for our industrial society. 96% of the all the world’s oil consumption is conventional. The demand for oil was increasing last 140 years, with some small decreases during the major recessions in 1973 and 1979. Especially last 20 years, during the development of the fast growing economies in Asia, oil demand is increasing drastically. (EIA, 2011) The reserves of crude oil are not infinitely, so it is not hard to imagine that this situation is unsustainable. According to estimations of both the United States Geological

Survey (USGS) and the American Association of Petroleum Geologists (AAPG), approximately 90 to 95% of the conventional oil has been discovered, and about half of it has been used. (ASPO, 2007) Many more oil experts agree with this:

Jeroen van der Veer, ex-CEO of Shell, said in 2006: “My view is that ‘easy’ oil has probably passed its peak.” Oil companies Chevron and Shell both stated: “The era of easy oil is over.” (Middelkoop & Koppelaar, 2008: 84) Even more important than when the oil is finished, is the moment where the worldwide oil production can no longer increase, and thus no longer match a rising oil demand. That 6 moment is called ‘peak oil’. An important scientist in the field of peak oil is geologist and founder of the Association for the Study of Peak Oil and Gas, Colin

Campbell. His definition of Peak Oil is generally considered as the official one;

“The term Peak Oil refers to the maximum rate of the production of oil in any area under consideration, recognising that it is a finite natural resource, subject to depletion.” (Campbell, 1997) The expectations of governments, agencies, companies, and individual scientists when peak oil will occur differ greatly.

Whereas most big oil companies predict a peak between 2020 and 2040, the smaller independent oil companies and individual scientists expect the production to peak before 2018. (Koppelaar, 2005) Although their time-scale predictions differ, these scientists have one thing in common, and that is the belief that Peak Oil is unavoidable. Campbell explained it very easy: “It’s quite a simple theory and one that any beer drinker understands. The glass starts full and ends empty and the faster you drink it the quicker it’s gone.”

The Hirsh report examined the likely impacts of peak oil and the energy crunch that will follow. The main finding is that it has disastrous economical, political, and environmental consequences, which come at very high costs.

(Hirsch, 2005: 4) An increased production of other energy sources to replace for the decreasing production of oil, and to satisfy the increasing demand for energy, is a solution to mitigate the supply based problems. This paper is about one of those solutions; Nuclear energy, which is often proposed by scientists or policymaker as an option to avert an energy crunch. The feasibility of economic, political, environmental, and technical aspects of nuclear energy, will be tested in order to answer the following research question: 7

“In order to avert an energy crunch, is nuclear energy a suitable alternative to complement for the decreasing production of conventional oil?”

The expected problems after peak oil are supply based problems.

Therefore, it is more relevant to consider mitigation strategies that solve the problems on this supply side of the energy market. Mitigation strategies that solve the problems on the demand side, such as increasing energy efficiency, are therefore not considered in this paper. Besides an increase nuclear energy production, other optional technologies to increase energy supply are oil sands, coal to liquids, gas-to-liquids, enhances oil recovery. The characteristic that all these options have in common is that they emit greenhouse gasses during the fuel combustion, and this is increasingly problematic. Besides an energy crunch, another problem that is global warming. Global warming is believed to be caused by greenhouse gasses such as CO2, CH4, and N2O. (IPCC, 2007: WG I) Climate change comes with many negative consequences for society. To mitigate for these, it is important that greenhouse gas emissions are reduced as much as possible. In order to do so, international treaties, such as the Kyoto protocol, have been established. Considering such long term environmental objectives, and given the fact that nuclear energy does not emit any greenhouse gasses during the energy generating process, it is much more relevant to study the feasibility of nuclear energy than that of fuel combustion technologies. Numerous other low-carbon alternatives have been proposed as well. Technologies that make use of solar radiation, wind, and tidal powers to generate energy have great potential, and are already emerging rapidly. The reason to study the feasibility of nuclear 8 energy instead however, is its controversy in contemporary science and politics, especially after the recent Fukushima accident. Although the technology exists already for over half a century, the debates about its suitability are still going on.

The relevance, the importance, and the necessity of the question whether or not nuclear energy is a suitable alternative to complement for the decreasing production of conventional oil, is emphasised by the findings in the Hirsch report:

“The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented.”

(Hirsch, 2005: 4) Furthermore, there is a certain sense of urgency. Like other mitigation options, the transition to an increasing nuclear energy production takes considerable time. The longer this development is delayed, the harder the economic hardship will be. (Hirsch, 2005) The answer to the research question has implications for governments and investors. Policy makers have the interest to prevent an energy crunch and high energy prices, to avert a disrupted economy and other chaotic social implication such as described in the Hirsch report.

Furthermore, the transition to other energy sources requires changes in legislation, and decisions that need to be taken long before. Investors in their turn could use the answer on the research question to make long term decisions about whether or not to invest in nuclear energy. The answer can even has its effect on the public’s perceived social value of nuclear energy. If nuclear energy turns out to be a suitable alternative, the resistance in society towards nuclear energy these days, might diminish. 9

The scientific relevance of this paper lies in the concluding remarks of the

Hirsch report, in which the need for more information about potential capacity, costs, timing, etc. of mitigation actions is emphasised. This paper has just that goal; providing information about the feasibility of one of those mitigation technologies. The potential of nuclear energy has been researched by many scientists before, but often this was done from one particular perspective only.

Yoo and Ku (2009) and Yoo and Jung (2005), for example searched for the economic effects of nuclear energy, by analysing the relationship between nuclear energy and economic growth. Jun et al. (2009) took a more political perspective and measured the social value of nuclear energy. Furthermore, Ayoub and Yuji

(2012) wrote about the effect of governmental intervention to promote renewable energies. Another example that was written with a political perspective is the one of Sen and Babali (2007), who describe the effect of conflicts in the Middle East on the security of energy supply. Elam and Sundqvist (2011) focussed only on nuclear waste management, and Silverio and Lamas (2011) discuss technical developments related to nuclear fuel reprocessing. The goal of this paper instead, is to combine those topics, and come to one comprehensive conclusion. Such a multi-perspective analysis is especially important in the field of nuclear energy, where economic, political, environmental, and technical interests are interwoven and can even be completely conflicting.

METHODOLOGY:

The methodology that was used in this thesis is one of a literature research. In order to find an answer on the research question, a variety of sources was analysed. These sources include scientific papers that describe economic and political theories that can be related to nuclear energy. Another import source of information were the findings from scientific bodies such as the International

Panel on Climate Change (IPCC). Also reports from intergovernmental organisations such as the Organisation for Economic Co-operation and

Development (OECD), and the International Energy Agency (IEA) as well as governmental agencies such as the US department of energy and its Energy

Information Administration (EIA) were used. Together with reports from professional geological agencies such as the American Association of Petroleum

Geologists (AAPG) or the United States Geological Survey (USGS) they were useful to retrieve data about resource reserves, CO2 emissions, and future predictions, reviews, and outlooks. In addition, international treaties such as the

Kyoto protocol, and the Non-proliferation treaty will be discussed in this thesis.

Their content and implementation is important for the development of nuclear technology. Finally, findings and missions of interest groups such as the

Association for the Study of Peak Oil and Gas (ASPO), the World Nuclear

Association (WNA), and the International Atomic Energy Agency (IAEA) are also important to get a better understanding of the possibilities, and limitations of nuclear energy.

It is important to note that the used method in this paper is not comparing hard quantitative data. Instead, the focus is more on the characteristics of 11 different energy sources, and how these fit in the larger whole of economic, political, environmental, and technical objectives and possibilities.

ECONOMIC PERSPECTIVE

There are several aspects that make the use of nuclear energy an economically feasible alternative to complement for a decline in conventional oil production. First of all, the cost of nuclear energy in comparison to other energy sources; a transition to another energy source is unlikely to happen when this is not cost competitive. Secondly, it will be shown that the breakdown structures of those costs are different for nuclear plants than for fuel combustion plants, and this has implications for long term decisions of politicians and investors.

Moreover, it is relevant to consider not only the costs of the energy generation itself, but also the externalities. In the case of nuclear energy, the costs of the waste disposal and decommissioning have to be taken into account, whereas for fossil burning alternatives, taxes on CO2 emissions contribute to the final price of energy. The last issue that will be discussed is the cross price elasticity of crude oil with respect to nuclear energy. With the use of cross price elasticity it can be calculated whether a country has the potential to increase its nuclear capacity, or if its energy portfolio has already reached long term equilibrium.

In terms of costs, several agencies and experts have concluded that nuclear energy is a good alternative energy source to substitute for oil. (EU commission,

2007) (OECD/EIA/NEA, 2010) This is important when the oil production decreases after the occurrence of peak oil. The International Energy Agency calculated that nuclear energy is currently the cheapest option for low carbon electricity generation. (EU commission, 2007: 25) Also, The World Nuclear

Association stated that unless there is access to cheap fossil fuels, nuclear power is cost competitive with other forms of electricity generation, even when waste 13 disposal and decommissioning costs are included. (World Nuclear Association,

2011)

A difference between fossil burning energy and nuclear energy is how their cost breakdown is structured. This is an important issue for investors and policy makers that have to make long-term decisions. In a reactor where fossil fuels such as gas, coal, and oil are burned, the fuel itself contributes for a large amount to the generating costs of energy. Whereas the costs of uranium, the actual fuel for a nuclear reactor, represent only a limited part of the total costs for nuclear energy. Instead, the major contributors to the total costs of nuclear energy are the initial building costs of the facility, the costs of storage and disposal of used fuel, and the decommissioning costs at the end of the lifetime of a nuclear plant.

(MIT, 2003: 21, 37) (Ristinen & Kraushaar, 2006) These facts are important for future energy prices; Because of a standardized design, the construction costs of a new nuclear plant have dropped, (WNA, 2005: 7) and they are believed to be reduced by 25% more on the medium-term (MIT, 2003: 41). Because the initial building costs form a large part of the total costs, nuclear energy prices can be expected to decrease significantly. However, projects to develop new nuclear power plant often suffered from delays in the process, due to extensive regulations or technical problems, resulting in higher than planned costs.

Recently built plants in Asia however, show that projects can be finished on schedule and on budget. (WNA, 2005: 7, 19, 22) The second effect that the cost breakdown structure has on future energy prices is related to price volatilities.

Uranium itself is only a small contributor to the total costs, so a potential price increase will not have much effect on the price of nuclear energy. For oil, gas, and 14 coal on the other hand, a price increase of the raw ingredient has a more significant effect on the end price of energy. This price stability makes nuclear energy more attractive alternative for investors. However, there are also legitimate reasons why investors are reluctant to invest in new nuclear energy facilities. Besides the fact that the overnight costs are very high compared to fossil combustion plants, it is also the uncertainty that plays a role. The value of the investment depends on the developments in other field, such as the improvements of solar technology and other green alternatives, development in

CCS technology, legislation, and taxation policies. Even accidents in other nuclear plants can cause delays for the developments of new ones. Furthermore, licence procedures, from design to construction and operating licences are time consuming, and contribute to the high investment costs.

What is often missing in price comparisons between different energy sources is the economic value assigned to environmental impacts, such as the emission of greenhouse gasses in fossil burning facilities. However, this is about to change; many countries have come up with actions to promote the transition from conventional fossil energy to renewable energy. Those measures include higher taxes on energy generated by fossil fuel combustion. (Ayoub & Yuji, 2012:

190) A MIT study found that when a system of such carbon emission credits is implied, it can give nuclear energy generation a cost advantage. It shows that when the costs of carbon emissions are included, an emission cost of 100 to 200 dollars/tonne carbon significantly improves the competitiveness of nuclear energy compared to fossil burning alternatives. (MIT, 2003: 8) At this moment, a carbon tax of 100 to 200 dollars/tonne would be very high. Proposed carbon taxes do 15 usually not exceed 30 dollars, but Sweden, which is a forerunner in the field of sustainable energy and energy efficiency, has a carbon tax of 130 dollar (SEK

930)/tonne. When other countries show more political will to solve the problem of greenhouse gasses, and establish or increase carbon taxes as well, the competitiveness of nuclear energy might be improved further. (IEA, 2008: 24)

In order to avoid those carbon emission charges, energy companies can invest in Carbon Capture Systems (CCS). Newell et al. found that when climate rules and regulations are sufficiently stringent, CCS is economically attractive.

(Newell et al., 2006: 573) It will decrease the emitted greenhouse gasses and thus the charges, but it is also an extra investment that will improve the cost- competitiveness of nuclear energy compared to other fossil fuels even more.

Lee and Chiu investigated whether nuclear energy has the potential to substitute for oil and become an important factor for countries’ industrialisation in the future. They found that this depends on the long-run cross-price elasticity of nuclear energy demand with respect to oil. (Lee & Chiu, 2011; 247) When this is positive, suggesting a substitute relationship between oil and nuclear energy, the long-run equilibrium is not yet reached and a further transition from oil to nuclear is possible. In that case, for example in the U.S. and Canada, nuclear energy can be used effectively to replace oil demand on long-term. In France,

Japan, and the U.K. on the other hand, the relationship is complementary, which means that nuclear energy is not an option to replace oil. (Lee & Chiu, 2011; 247)

An explanation for this difference is that these three countries already generate a large amount of their national energy in nuclear facilities, and that their energy portfolio is already in a long-term equilibrium. The incentive of the US and 16

Canada to increase the nuclear capacity depends on their alternatives; as long as they hold large amounts of relatively cheap fossil resources such as tar sand in

Canada and coal in the US, they are less eager to increase the nuclear capacity.

Another finding from Lee and Chiu that is relevant to the question whether nuclear energy is a suitable alternative to complement for a decreasing oil production is that there is a significant impact of oil prices on the long-term nuclear energy consumption. Increasing oil prices will stimulate the development of nuclear energy. (Lee & Chiu, 2011; 248) This finding implies that nuclear energy will be a good alternative for conventional oil, because peak oil theories predict oil prices to increase.

It can be concluded that nuclear energy is, in economic terms, a more than suitable alternative to complement for the decreasing production of conventional oil. In terms of cost, nuclear energy is already competitive with other energy sources such as coal, oil, and gas. Moreover, this cost competitiveness can even be expected to increase in the long run for several reasons: First of all a nuclear power plant has higher initial costs than a fossil combustion plant, its fuel contributes only to a fraction of the total costs. Furthermore, the initial building costs are expected to decrease. Thirdly, carbon emission taxes are emerging, and will increase the price of fossil burning alternatives. In addition, fossil fuels, starting with oil, and later gas, are depleting and getting scarcer and thus more expensive. Moreover, oil prices have a significant impact on nuclear consumption in the long run, so increasing oil prices due to peak oil, stimulate the demand for nuclear energy. Finally, the cross price elasticity of nuclear demand with respect 17 to oil demand shows that there is considerable growth potential for nuclear energy in the US and Canada.

POLITICAL PERSPECTIVE

The objective in this chapter is to analyse the political implication of nuclear energy in order to find out whether it is an alternative energy source that fits general political objectives, such as geopolitical stability, safety, and a secure energy supply. Policy makers have a large impact on decisions concerning nuclear programs, so the satisfaction of those objectives is important for its development. In case these objectives cannot be met, political support will be an obstacle for nuclear as a future energy resource. The first relevant issue is the distribution of uranium over the world, because it affects geopolitical relations and the stability of energy supply. Another issue in political decision making is the risk for nuclear accidents; politicians are concerned with safety, so a high risk negatively affects nuclear energy’s development. And because elected policy makers are supposed to represent the public’s opinion, the social valuation of nuclear energy is important. A negative public perception concerning nuclear energy is a burden for its development. The last political issue is the risk for nuclear proliferation. International treaties are important to prevent this from forming an obstacle.

One of the factors that make an energy source politically suitable is its security of supply. Energy security is commonly defined as reliable and adequate supply of energy at reasonable prices. (Bielecki, 2002: 237) Not only the fact that there is enough of a particular resource available matters, also is its distribution over the world important for the security of energy. A large majority of the conventional oil reserves are located in the Middle East, an area that has been politically unstable for a long time. Sen and Babali (2006) emphasise the 19 importance of peace and cooperation in the Middle East. The numerous wars in the area, and the risk for radical terrorist cause problems for an uninterrupted oil supply. Also Bielecki concludes that such security concerns are justified because in some sectors, a strong concentration of market power has developed.

(Bielecki, 2002: 249) Furthermore, he expects that energy security is becoming a more problematic issue in the future.

The reserves of uranium, the vital ingredient for nuclear fission, in contrast to oil, are widely distributed over the world; the thirteen countries with the largest uranium reserves are: Australia, Kazakhstan, Canada, USA, South

Africa, Namibia, Brazil, Niger, Russian Federation, Uzbekistan, India and

China. (IAEA, 2009: 11) The fact that uranium can be found in such a diversity of countries, has the advantage that there is a more guaranteed supply of uranium, and thus energy. Furthermore, it decreases the chance for possible geopolitical conflicts and energy wars. A stable, uninterrupted supply and no geopolitical conflicts are important political objectives. Nuclear energy has the advantage of fitting those objectives, which makes it a good alternative energy source for oil.

However, nuclear energy comes with a risk, and politicians have the objective to judge those risks and to act as risk averse as possible, because stability and safety are considered more important for a country. When the risks are too high, politicians can decide to phase out or stop a nuclear program.

Nuclear accidents may negatively influence the political support for the progression of nuclear energy. Several nuclear accidents have happened since its commercial introduction in 1954. The three most notorious were the Three Mile

Island disaster (1979), the Chernobyl disaster (1986), and the very recent 20

Fukushima disaster (2011). Those tragedies are mostly followed by political actions that postpone or hold off new nuclear projects. (EIA, 2011: 13) After the latest disaster in Japan, the German government decided to accelerate the process to leave nuclear energy. Seven power plants were immediately shut down, of which three will never open again. Other German nuclear plants will close earlier than planned. (Breidthhardt, 2011) Actions, such as those taken in

Germany have a negative effect on the potential of nuclear energy as an alternative for oil.

Policymakers are supposed to represent their country’s citizens, so a perceived danger and resistance towards nuclear energy by the public is problematic for its development. However, such a negative image does not have to be permanent. Jun, et al. studied the social acceptance of nuclear energy. They found that public acceptance is one of the most important barriers for the further development of nuclear energy. Even though recent technological and institutional innovations lowered the risk of nuclear accidents, and increased the benefits compared to other energy sources, nuclear energy is still perceived as very negative. The result of their study of the social valuation of nuclear energy, suggests that this social undervaluation is due to a lack of communication and delivery of information to the public about nuclear energy. (Jun, et al., 2010:

1475) A solution to increase the public acceptance and the social value of nuclear energy is thus by providing precise and appropriate public information. In order to start, restart, or expand national nuclear energy programs, informing the public, to generate support, is essential. Countries that are currently reducing their national nuclear program due to low public valuation of nuclear energy 21 should follow the example of France, where early education of young children on the topic of energy is an effective strategy for support of future policy. (Jun, et al.,

2010: 1475) This can be seen as state indoctrination, and indeed, it serves a certain purpose, but as long as this education is based on facts, it is legitimate.

Incorrect knowledge on the other hand forms an unnecessary obstacle for the development of nuclear energy.

In terms of safety, nuclear energy is contrary to the interest of politicians, who should strive for the safety of their country. Nuclear energy program comes with a risk for the proliferation of nuclear materials. Although the nuclear reactors themselves do not have a significant proliferation risk, and although the fuel they use cannot be directly used in nuclear bombs, there are some connections; The technologies that are used in civil nuclear power plants overlap with the technologies that can be used for nuclear weapons, and the knowledge of radioactive materials is very important for the development of a weapon program. (American Physical Society, 2005: 2) Energy expert Amory Lovins formulated this as follows: “Nuclear power plants are a nuclear weapons starter kit”. (Cirincione, 2009) The concern of the United Nations is that countries with violent intentions can secretly use their nuclear power plants and developed knowledge to produce essential materials for nuclear weapons. Especially Iran is notorious for this; although its government officially states that they use their nuclear installation for scientific- and energy production purposes only, the international community fears that they enrich uranium to 20 percent fissile purity, and now uses diplomatic methods to make Iran suspend their program.

(Quinn, 2012) Even countries that have no nuclear program yet cause 22 international political unrest. Joseph Cirincione, a non-proliferation expert, writes that he is disturbed about the intentions of several Middle Eastern countries that have suddenly become interested in nuclear power. The United

Arab Emirates, Turkey, Tunisia, Morocco, Egypt, Morocco, Saudi Arabia, and

Tunisia have plans to develop civilian nuclear programs. Cirincione writes: “This is not about energy, it is about Iran...” He even thinks that we are witnessing the beginning of a nuclear arms race in the Middle East; this is because Iran’s rivals are afraid of the political and military power that nuclear weapons might give

Iran. (Cirincione, 2009) Up until today, no individuals or groups have ever stolen nuclear materials for use in weapons. (Sailor et al., 2005) Nevertheless, the threat itself is already a burden for the expansion of nuclear energy programs.

Therefore, effective safeguards and international collaboration on non- proliferation is necessary for the further development of nuclear energy systems.

The most important institution that works to prevent nuclear proliferation is the

International Atomic Energy Agency (IAEA). Besides that, there is the Treaty on the Non-proliferation of Nuclear Weapons (NPT), which is ratified by 189 countries. (UN, 1968) The only non-parties are Israel, India, Pakistan and North

Korea, that all have nuclear weapons. Other approaches to non-proliferation are sanctions against nations pursuing weapons, which is currently happening to

Iran. Or the destruction of nuclear facilities that could lead to weapons; Israel did this with facilities in Bagdad (1981) and Syria (2007). (Intriligator, 2011: 157)

Measures and treaties of international agencies can prevent that the risk of nuclear proliferation forms an obstacle in the development of nuclear energy. So whether or not nuclear energy is a politically suitable alternative depends 23 partially on the effectiveness of international treaties in order to prevent proliferation.

It can be concluded that there are still some serious constraints to nuclear energy that make it problematic for politicians to support an energy transition.

The distribution of uranium resources over the world has positive effects on the geopolitical stability, and consequently results in a more secure energy supply.

However, the risk of accidents and the risk for nuclear proliferation result in a low social value of nuclear energy. Last year’s accident in Japan and the current threat coming from Iran are, based on historic events, likely to result in a reluctant attitude toward nuclear energy in Europe and the US. To make nuclear energy a politically attractive alternative, further developments in the field of safety and better public information to improve public perception are necessary to take away these constraints.

ENVIRONMENTAL PERSPECTIVE

In this chapter, nuclear energy will be analysed on environmental suitability. A suitable energy source in terms of environment has low negative impact on nature, animals, and humans. Important examples of those negative impacts are pollution, toxic gasses and radiation, and greenhouse gas emissions.

Nuclear energy is in these terms twofold; on the one hand has it an extremely low carbon footprint, but on the other hand are the used fuel rods radioactive for millions of years. Those two characteristics play an important role for the future of nuclear energy.

Because of its low carbon emission, nuclear energy is an attractive energy source to generate large amounts of electricity, and still meet the goals set by international environmental treaties to reduce global warming. Meeting those objectives is important, because the numerous scientists of the

Intergovernmental Panel on Climate Change (IPCC) argue that many current negative environmental changes are due to global warming and predict that future environmental related problems will occur. (IPCC WG II, 2007) The IPCC states in its fourth assessment report that “warming of the climate system is unequivocal”, and that the “Most of the observed increase in global average temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations.”’(IPCC WG I, 2007: 5,

10) Those findings suggest that humans can mitigate the negative effects, so international efforts are made to reduce greenhouse gasses. The Kyoto protocol, aims to fight global warming by stabilizing greenhouse gasses. Those long lived greenhouse gasses include: Carbon dioxide (CO2), methane (CH4), and nitrous 25

oxide (N2O). The IPCC proposed to stabilize greenhouse gas concentrations by a whole series of mitigation policies, and for the energy supply sector, this also includes the further development of nuclear energy. (IPCC WG III, 2007) In terms of greenhouse gas emissions, nuclear energy is a perfect option, because during the power generation process itself, no greenhouse gasses are emitted. Oil combustion on the other hand, produced 10.6 Gt CO2 in 2009, and this is expected to grow to 12.6 Gt in 2035. The CO2 emissions coming from coal combustion, another alternative for oil, are even higher: 12.5 Gt in 2009, which is projected to grow to 14.4 Gt in 2035. And for gas, these numbers are: 5.8 Gt in

2009, and 8.4 Gt in 2035. (IEA, 2011: 8) Note that for all these energy sources the

CO2 emissions are increasing. Considering the need to reduce CO2 emission in order to mitigate for climate change, nuclear energy has a large potential advantages above fossil combustion technologies such as coal and gas. However, it needs to be taken into account that during the production process of fuel for the reactors, some CO2 gets emitted. (Kraushaar & Ristinen, 2006)

Nuclear power generation might be favourable for the environment in terms of reducing greenhouse gasses and so slowing down global warming, but nuclear waste causes serious environmental problems. The radioactive material that is left over after the energy generating process is dangerous for the environment. This so called high-level waste can be radioactive up to many millions of years, and can make humans and animals terminally ill. Therefore, it is important to keep it on a safe place. It is the task of agencies such as the

International Atomic Energy Agency (IAEA) and the United States Nuclear

Regulatory Commission to monitor nuclear waste. Besides that fact that the 26 waste is so dangerous, it is also problematic that it stays radioactive for millions of years. Even though we would have the technology to keep it safe, there is no guarantee that later generations will not look for it out of curiosity. It is impossible to predict how society and the state of science will be in thousand years, and equally difficult to warn people living thousands of years from now for the dangers of a technology that they might not even know. Mostly, the waste is stored on the reactor site, in so called dry casks; steel cylinders stored in a concrete bunker. (Nuclear Regulatory Commission, 2011) Another possibility is to store the waste deep underground, in sealed containers, but even there, it is not guaranteed safe. In the German village Asse, barrels with nuclear waste were stored in an old salt mine, but due to bad maintenance they started leaking, thereby threatening the safety of the groundwater. Underground storages can also be dangerous in case of earthquakes. Sweden is with their KBS method one of the few countries with that has moved towards a safe long-term solution for this problem. (Elam & Sundqvist, 2011: 246) With the KBS method, the nuclear waste is capsulated in iron and copper, and is then stored in drilled holes in rock.

Another alternative for the radioactive waste problem is the reprocessing of the spent fuel. After it has been used, the nuclear fuel has still some useful energy in it, and techniques that enable to reprocess this have been developed. Although, these reprocessing technologies are still too expensive to be economic feasible, some countries already use the technique. (Sylverio & Lamas, 2011)

It can be concluded that the environmental suitability of nuclear energy is twofold. On the one hand it is a green energy source that fit with globally set goals to reduce greenhouse gasses and so mitigate for negative climate change, on 27 the other hand is its waste very harmful for humans, animals, and nature.

Improvements for waste disposal are needed when nuclear energy takes a larger share of the global energy supply.

TECHNOLOGICAL PERSPECTIVE

It has been described in this paper that economic, political, and environmental aspects are important while analysing nuclear energy as a complementing energy source for conventional oil. However, the potential of nuclear energy above all depends on the state of technology. This chapter describes the current state of the nuclear technology and the developments that are to be expected in the next 50 years that might affect the economic, political, and environmental feasibility of nuclear energy. Useful developments could be improvements that take away disadvantages of nuclear energy, such as those related to safety, waste disposal, nuclear proliferation, and high building costs.

This chapter describes the history of nuclear energy, which is relevant to make expectations about the potential of prospective technologies. Finally, two technologies that are currently developed by nuclear engineers, breeding technology and fusion technology, will be discussed.

The course of history of nuclear energy is not only the base of the state technology today, it is also relevant to project predictions for the future. Since the first commercial nuclear power plant in 1957, there has been a development towards the goal of safer, both in terms of meltdown and proliferation, and more efficient nuclear reactors, that furthermore operative at lower costs. The power plants that have been developed during the last 55 year, and those predicted to be developed in the next 20 years are categorised into generations. The early prototypes, built between 1950 and 1960 are considered to be part of the first generation. They were usually very small. The only remaining commercial generation I power plant, located in Wales, will permanently shut down later this 29 year. (Goldberg & Rosner, 2011: 4) The second generation power plants were built between 1960 and 1980. They were designed to be reliable and economical, and these reactors still form the majority of nuclear plants around the world.

They include the light water reactors such as the boiling water reactor (BWR), the pressurised water reactor (PWR), and the supercritical water reactor

(SCWR). The lifetime is usually 40 years, but this is often extended. (EIA, 2011:

13) The youngest generation is the III and III+. Improvements that are made compared to generation II are: a better thermal efficiency, safety, a higher burnup percentage of the fuel, and a standardised design, which can decrease the building costs. Nevertheless, reality shows that the overnight costs have doubled over the last 3-4 years. The operational lifetime of the generation III and III+ is increased; 60 years but potentially much longer. New built reactors are usually light-water reactors of this type, and many more are planned. (Goldberg &

Rosner, 2011) The history of nuclear energy teaches us that, although the technology did improve in terms of safety and efficiency, it went slow and came with interruptions. Nuclear accidents in the past have caused delays on the growth of the nuclear energy; The Three Mile accident stopped the growth in the

US, and after the Chernobyl accident European power plants were disturbed as well. (Ahearne, 2011: 578) Recent political decisions to reduce the nuclear program as a reaction on the Fukushima accident, (EIA, 2011: 13) such as in

Germany (Breidthhardt, 2011), indicate that history will repeat itself and that the building of new power plants is probably to be delayed again.

Uranium is, like oil, coal, and natural gas a non-renewable resource. A fact that eventually results in similar problems as those threatening the oil 30 production today; one day the uranium will run out. This would imply that nuclear energy can, no matter how cost competitive, no matter how politically attractive, and no matter how environmental responsible, never be a long term solution. The fourth generation reactors however, offer enormous potential for extending the lifetime of the uranium reserves. Breeding reactors, also called fast reactors, are more efficient; where a first, second, or third generation reactor can use about 2% of the thermal energy in uranium, a breeder reactor can use 80% of it. (Fjaestad, 2009: 2) In addition, breeding reactors can produce more fuel than they consume, so they can actually ‘breed’ their own fuel. In older generations, only the 335U could be used for the fission reaction, the reaction in the breeder reactor however converts 238U, to 239Pu, which can be used as reactor fuel.

Natural uranium has about 140 times as much 238U as 335U in it, so this technology extends the lifetime of the uranium resource with about 140 times, which means that there will be enough uranium for thousands of years. (Ristinen

& Kraushaar, 2006, 184) And because less uranium is needed, the price of energy can decrease and energy security will increase. There are also advantages in environmental perspective; because more energy can be generated from the same amount of uranium, the waste can be reduced significantly. In addition, old nuclear waste can even be reused to generate energy. Thereby using existing waste useful and reducing the risk for nuclear proliferation.

The theory of the breeder reactor is known since the beginning of nuclear programs, and in 1946 the US already built a first breeder reactor. Fjaestad

(2009) analysed why the breeder reactor never grow out to a fully developed energy source for the future. The first problem was the development of uranium 31 prices; when new deposits were found the price did not increase as expected, thereby making it less necessary to develop the breeder reactor in order to save on fuel costs. Also some safety requirements were not met and even some partial meltdowns occurred in the US. And when costs turned out to be higher than expected, the support of technicians and politicians diminished. Fjaestad concludes that the breeder was a scientific success because in the last decennia many funds have been allocated to fundamental nuclear research. However, it was due to several international complications, a political failure. There has been international cooperation within Europe, called European Fast Reactor project

(EFR). Even some breeding reactors were built in Great-Britain, Germany,

France, Sweden, and the former USSR, however, such projects were terminated.

The combination of technical and economical difficulties, military implications, and even ideological objections, made that the technology never matched its promising potential, so governments stopped financing these projects and the

EFR was discontinued by 1993. (Fjaestad, 2009)

The need for clean, safe, and cheap energy is more necessary than ever before considering the expected decreasing oil production in the future.

(Koppelaar, 2005) Therefore, the technology of generation IV is being researched again. Twelve countries and Euratom are working together in the Generation IV

International Forum (GIF). They collaborate in order to solve the challenges of economics, sustainability, safety and reliability, and proliferation resistance and physical protection that were also described earlier in this paper. The GIF’s objective is to have 4th generation nuclear energy systems available to use around

2030. By then, many of the current nuclear power plants will be near the end of 32 their lifetime. (US DOE & GIF, 2002) Looking to the past, the GIF project is no guarantee for success, because an earlier collaboration attempt in order to develop generation IV technology, the EFR, failed. The effects of peak oil however, in combination with a fast growing world population, global warming and the problems with radioactive waste make generation IV more promising than ever, which could have its effect on the possibility of success this time.

An even more suitable nuclear technology would be nuclear fusion. During the fusion reaction of two nuclei, a large amount of energy can be released. The advantage of this technology is that there is an enormous store of fuel available to feed the fusion reaction, because the required deuteron atoms can be found in water. If the technology would work, enough resources are available to meet the global energy need for millions of years. In addition, like fission reactors, there will be no CO2 emission during the energy generating process. Finally, there are no radioactive reaction products at all, thereby elimination the waste disposal problem. (Ristinen & Kraushaar, 2006: 196-204) To share knowledge and investments related to fusion technology, the EU, US, China, Japan, Russia,

South Korea and India are collaborating in the ITER project (International

Thermonuclear Experimental Reactor). Currently, they are building a test facility in Cadarache, in the South of France. Despite these efforts, it is unlikely that fusion technology becomes a reality for energy generation in the next decades. The theory has been known for more than half a century, but has never showed some practical applications. Problems are that is very difficult to achieve the necessary temperature and particle density, and so far the technology has not been able to produce more energy than is used for the fusion reaction. In 33 addition, there are still some other constraints, such as the availability of particular materials to build energy plants. (Ristinen & Kraushaar, 2006)

The development of new technologies does not come with advantages only; nuclear safety engineer David Lochbaum (2004) says that especially new nuclear systems have a great safety risk. He explains that the risk profile during the three phases of the lifetime of a nuclear plant, the break-in phase, the middle life phase, and the wear-out phase, has the shape of a bathtub. Especially in the beginning of the lifetime, and during the wear-out phase the chance on problems is high whereas the middle life phase is relatively safe. The risk during the break-in phase comes from the many unexpected safety problems that occur in the first years, and the fact that engineers lack the operating experience to deal with those problems. (Lochbaum, 2004: 1)

The nuclear development so far went with several setbacks and delays, but shows progress. The breeding technology of fourth generation power plants is promising to solve the problems of finite uranium resources, waste disposal, energy security, and price stability. The generation IV International Forum is responsible for research and development in this field. Fusion energy can even completely solve the problems related to nuclear waste, but important developments in this technology are far less likely. However, the results of the

ITER project in the brand new facility in France will be decisive. And, no matter how promising the developments are, it has been shown that it comes with increased risk during the start-up phase.

CONCLUSION

It has become clear that in the field of nuclear energy, economic, political, environmental, and technical interests are interwoven and can even be completely conflicting. For that reason, it was necessary to take a multi- perspective approach to answer the main research question; In order to avert an energy crunch, is nuclear energy a suitable alternative to complement for the decreasing production of conventional oil?

The results of the analysis indicate that there were many aspects that make nuclear energy a very suitable source, but also some major constraints that need to be taken away to clear the way for a further growth of nuclear technology. The costs of nuclear energy are already competitive with other energy sources. Moreover, with higher costs for fossil fuels, CO2 emission taxes, and lower building costs in the line of expectation, the economic feasibility is even more promising.

Although nuclear energy has a certain value for politicians, i.e. more geopolitical stability, better energy supply, they are still reluctant towards it.

One reason for this is the low social value where nuclear energy suffers from, secondly the reluctance is based on the risk for nuclear accidents, problems related to waste disposal, and the risk for nuclear proliferation.

Especially the environmental aspect of nuclear energy is very controversial. The imminent threat of global warming and the negative effects of climate change demand for a low carbon energy source. In this perspective, nuclear is an attractive solution, would it not be that the problem of nuclear waste disposal is underestimated by almost all countries. 35

Technological improvements might take away those obstacles in the future, and clear the way for a long term solution. The fourth generation reactor, the breeder, might, in case the technology is working and feasible in the future, offer solutions for both the waste disposal problem and the fact that uranium reserves are finite. The same holds for nuclear fusion technology, but the probability that that will be feasible within the next 50 years is very unlikely.

Problematic will always be the fact that nuclear energy is especially useful to generate electricity. Oil on the other hand is being used for many more purposes. In particular the transportation sector will suffer from shortages in oil supply, because they rely on liquid fuels such as petrol, diesel, and kerosene. The automobile industry can switch to electric or hybrid technologies, but for trucks and airplanes this is more problematic. Gas- and coal-liquefaction technologies can have a role to create synthetic fuels, but this will come at higher costs.

It has to be noted that the solution to avert an energy crunch has to come from a combination of energy sources. Solely relying on nuclear energy is too risky for the energy security, and is furthermore impossible due to a variety of constraints, such as a limited building capacity, human resources, and infrastructure. Partly because of the rising fossil resource prices, and especially because of the increasingly problematic effects of climate change, there is also a major role for green renewable alternatives such as solar, wind, tidal, and geothermal energy.

Finally, to avert an energy crunch, also the demand side of the energy market needs to implement changes; higher energy efficiency, and a change in the behaviour of energy usage, i.e. more focus energy saving. 36

After all, it can be concluded that nuclear energy is a reasonable alternative to complement for a decreasing oil production, and so avert an energy crunch. However, there are still some constraints for the further growth of nuclear capacity. On the short term, a solution has to be found for the waste disposal problem. In order to this successful, close cooperation between scientists and politician is can be useful. In the long run, the problem of finite uranium reserves needs attention. In that sense, the fourth generation nuclear power plants is very promising. Further investment in research and development, together with international political and scientific cooperation, to develop these breeder reactors is extremely important. Not only to avert the energy crunch that will occur after peak oil, also to mitigate for the negative effects of climate change. Certain urgency is desirable, because peak oil and global warming will not wait for it. ∎ 37

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